Sustained demand and substantially higher prices for scrap export during the final weeks of 2020 meant a bright New Year for traders.

The cost of shipments of HMS 80/20 heavy steel scrap from northern Europe to Turkey soared from around US$293 per ton in November 2020 to US$399 in December and then hit US$432 early in early January 2021 before easing off later in the month.

US scrap had been particularly strong by the year-end with the Bureau of Labour Statistics showing iron and steel scrap prices rising 31.3% in December 2020, year-on-year to December 2019, and up 25.8% on the month before, the highest monthly increase of 2020.

Order books for most steel producers were generally full at the start of the year and that had the knock-on effect of boosting ferrous scrap prices for the third consecutive month. In the US, rates rose around US$100 per ton because of decent demand and fewer supply challenges.

Earlier in the month, as reported by Recycling International, contributors to the first BIR Challenge event in mid-January 2021 spoke of ‘an amazing 60 days’ for ferrous prices during which scrap prices from US sources had risen 60% to 70%.

Meanwhile, the latest short-term outlook from the International Rebar Producers Association (IREPAS) suggests supply remains on the short side in the global long steel products market and this situation will probably not change until the second quarter.

“Chinese demand for raw materials and semi-finished products has been providing the main boost to the markets,” IREPAS states. The outlook is encouraging for the scrap trade: “It seems that everything is evolving around scrap, which looks like being a leading focal point in the coming years, which may lead more Chinese capital into the scrap business.”